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Pressure Mounts to Tighten Rail Tank Car Standards

Pressure is mounting inside and outside Washington, DC, for the Department of Transportation (DOT) to order the retrofit or phase-out DOT-111 tank cars that are used to transport crude oil and ethanol by rail. Proponents of the effort note that a number of the tank cars involved in the fiery crash of tanker cars carrying Bakken crude in Quebec earlier this month were DOT-111 cars.

Sen. Charles Schumer (D-NY) was the first lawmaker to call for heightened regulations, noting that the DOT-111 tanker cars have proven to be flawed, out-of-date and a factor in hazardous material spills during derailments.

The freight rail derailment in Lac-Megantic, Quebec, which killed 50 people, in combination with the increased shipments of shale oil along New York railways to the Port of Albany, led Schumer to urge a corresponding increase in safety measures for New York freight rail, which must be implemented by DOT's Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

The first of what is expected to be a number of lawsuits in the Quebec incident was filed Tuesday in Cook County, IL, where the president of the railway resides.

"There will be many, many more lawsuits," said Peter Flowers, partner with the Chicago law firm of Meyers & Flowers, which filed the first lawsuit. Two more lawsuits were to be filed Thursday, he added. All told, there could be a total of 30-40 lawsuits. The first named Ed Burkhardt, president of Rail World, which is parent company of the railway involved in the crash, tank car leasing companies and individual petroleum companies.

The lawsuit contends that it was the responsibility of the railway and petroleum companies to operate their businesses in a safe manner. Early reports have listed several possible causes for the Quebec crash, and Tuesday Canadian authorities addressed several operational issues saying that any train carrying dangerous goods must have at least two operators and must not be left unattended on a main track. Transport Canada also issued directives regarding how and when hand brakes should be set.

The first lawsuit alleges that many of the cars involved in the runaway train disaster were DOT-111 tanker cars, and were not properly designed to protect the car from being punctured, resulting in hazardous liquids being spilled. The National Transportation Safety Board (NTSB), and others federal officials complained about this design flaw as far back as the early 1990s. "It should have been changed years ago," Flowers told NGI.

In the wake of the fatal rail crash in Quebec, "I actually do believe they [the federal government] will sit up and take notice" and tighten the regulations for these rail cars in the United States, he said. "The federal government needs to take a real hard look at this." He estimated that 1,400 cars transport oil and ethanol each day across the United States.

The damage caused in Quebec by the DOT-III tank cars is something that I "have not seen in my lifetime," Flowers said.

Prior to the Quebec rail disaster, PHMSA "had already been considering amendments that would enhance rail safety, including for the DOT-111 cars," an agency spokesman said. The PHMSA and the FRA have scheduled public meetings Aug. 27-28 in Washington, DC, to take a comprehensive review of operational factors affecting the safety of transporting hazardous materials by rail, and regulating rail tank cars is expected to take center stage.

In rail transport, the DOT-111 tank car, also known as the CTC-111A in Canada, is a type of nonpressure tank commonly used in North America to transport oil shales from basins. Hydraulic fracturing of new wells in shale oil fields has rapidly increased the use of DOT-111 cars to transport crude to existing refineries along the coasts.

There are an estimated 310,000 tank cars in the current fleet, of which 240,000 are DOT-111 tank cars. All the DOT-111 tanks cars that are currently operating meet both older federal regulatory requirements and the tougher standards for newer cars formulated by the Association of American Railroads (AAR)-North American Tank Car Committee, according to AAR. Roughly half of the tank cars used to move crude now have been built to the higher standards spelled out by its Tank Car Committee, the AAR further noted.

In 2009, following the crash of of tanker cars in Cherry Valley, IL, that carried ethanol and crude oil, the AAR studied the crash worthiness of DOT-III tanker cars. Beginning on Oct. 1, 2011, a new standard for DOT-111 was recommended to require tanker heads and shells be constructed with thicker steel. AAR's recommended new standards were to apply only to newly manufactured cars; existing DOT-111 tanker cars were grandfathered from the stricter standards.

PHMSA agreed with AAR's position and issued an advanced notice of proposed rulemaking seeking public comments on the issue. Because of increased shipments of crude oil by rail and the tragic incident in Quebec, some believe U.S. regulators could issue new requirements by the end of the year.

The NTSB had taken issue with AAR's recommendation, saying that if no retrofits could be done on older DOT-111 cars, it suggested that the DOT-111 tankers cars for transportation of hazardous materials be phased out.

With the attention focused on oil rail transportation, an official with Crompion International hopes U.S. regulators will require the use of newer grades of steel and metals in the construction of tankers that are transporting crude oil out of the shale basins.

Existing federal regulations allow stainless steel grades produced to standards which are more than 100 years old, to be used in constructing oil tankers, but the regulations ignore the newer high-strength, corrosion-resistant steel materials, said Ken Grantham, executive vice president of the Baton Rouge, LA-based supplier of specialized stainless steel.

These are the "next generation of metals," and are "significantly better," stronger and corrosion-resistant, he said. These new grades of steel have been around five to six years, and are trying to find their way into the marketplace, Grantham told NGI. They're being used in petrochemicals, sewer treatment and other industries, but not in the oil tanker industry. "They're not included as an option" for that use.

"I'm sitting here scratching my head" trying to figure out why. "Wow, this is unbelievable," Grantham said. He said he's hoping that the fatal tanker explosion will spur U.S. tanker regulators to sit up and take notice of the need to construct tanker cars with more modern steel.

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